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Malta - Comparison of Investment |Hedge | Mutual |UCITS |Funds
Type of PIF

Experienced Investor Fund

Qualifying Investor...
Malta - A Legitimate Low Tax EU Jurisdiction
100% EU & OECD Compliant
Collective Investment Schemes
Hedge Funds - Professi...
Malta’s International Legal & Advisory Firm

Licensable Activities
Investment funds must have a license from the Malta Fin...
Malta’s Highly Qualified Earners Scheme
15% flat rate income tax rate for senior employees within the
financial services s...
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Malta Investment Funds - Hedge | Mutual Funds- Essential Facts Tables-Acumum- Legal & Advisory

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Table overview of essential facts and requirements for setting up investor funds / hedge funds in the low tax EU jurisdiction of Malta.
* Collective Investment Schemes | Hedge Fund | Mutual Fund | AIFMD | PIFs | Alternative Investment Schemes

Published in: Economy & Finance, Business
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Malta Investment Funds - Hedge | Mutual Funds- Essential Facts Tables-Acumum- Legal & Advisory

  1. 1. Malta - Comparison of Investment |Hedge | Mutual |UCITS |Funds Type of PIF Experienced Investor Fund Qualifying Investor Fund Extraordinary Investor €10,000 / $10,000 €75,000 / $75,000 €750,000 / $750,000 Yes No No Eligibility for Investors Satisfy definition of experienced investor Satisfy definition of qualifying investor Satisfy definition of extraordinary investor Investment Restrictions Certain rules apply to property funds None - except as specified in offering documentation None - except as specified in offering documentation 100% NAV for borrowings used for investment purposes & leverage via derivatives. Assessed on VaR (value at risk) or Commitment Approach. Unrestricted borrowing on temporary basis for liquidity purposes. None - except as specified in offering documentation None - except as specified in offering documentation 7 business days 7 business days 7 business days Offering Memorandum Minimum Requirements Minimum Requirements Optional Financial Statements / Reporting Annual To be submitted with Custodian’s report Annual No Custodian’s report required Annual No Custodian’s report required Compliance Report Semi—Annual Semi—Annual Semi—Annual Statistical Returns Quarterly Quarterly Quarterly Investment Manager Optional - depend on competence - self managed PIFs allowed - can act as administrator Optional - depend on competence - self managed PIFs allowed - can act as administrator Optional - depend on competence - self managed PIFs allowed - can act as administrator Investment Advisor Optional Optional Optional Administrator Optional Optional Optional Required Can also act as MLRO Required Can also act as MLRO Required Can also act as MLRO Required if PIF marketing own units Required if PIF marketing own units Required if PIF marketing own units Required - assumes monitoring role - need not be in Malta - must be independent from fund manager Optional - to implement safe custody arrangements - must be independent from fund manager Optional - to implement safe custody arrangements - must be independent from fund manager Yes if all officials & service providers outside of Malta Yes if all officials & service providers outside of Malta Yes if all officials & service providers outside of Malta Independent Director from Manager /Custodian Required Required Required Self Managed Funds Allowed Allowed Allowed Auditor Required Required Required Listing Optional Optional Optional Investor to declare qualifies as Experienced Investor Investor to declare qualifies as Qualifying Investor Investor to declare qualifies as Extraordinary Investor No Malta Tax No Malta Tax No Malta Tax No Capital Gains for Non Residents No Withholding Tax on Distributions No Capital Gains for Non Residents No Withholding Tax on Distributions No Capital Gains for Non Residents No Withholding Tax on Distributions Not Required Not Required Not Required Pledge of Units Allowed Allowed Allowed Side Pockets Allowed Allowed Allowed Minimum Investment Investment Limits Borrowing Limits Time for MFSA Response Compliance Officer MLRO (Money Laundering Officer) Custodian / Depository Local Representative Declaration Taxation - Fund Taxation - Investors Promoter Requirement
  2. 2. Malta - A Legitimate Low Tax EU Jurisdiction 100% EU & OECD Compliant Collective Investment Schemes Hedge Funds - Professional Investor Funds—UCITS Maltese law uses the term ‘Collective Investment Schemes’ for all forms of investment funds - including hedge funds, retail or non-retail, as well as UCITS and non-UCITS funds. Multi Fund & Multi Class CISs A CIS may be established as a Multi-Fund CIS, meaning that it is capable of being divided into different classes of shares and a class or group of classes of shares constitute a distinct Sub-Fund of the CIS. A Sub-Fund may be allocated with assets and liabilities distinct from other assets and liabilities of the other Sub-Funds in the CIS. A Multi-fund CIS may create or issue new classes of shares constituting a new Sub-Fund—each Sub-Fund (class of shares) may be denominated in a different currency. A CIS can be a Multi-Class CIS if its share capital can be divided into different classes of shares, whilst not constituting in and of itself a Sub-Fund. Each class of shares may be denominated in a different currency. Multi-Class CIS’s cannot elect to segregate any of its assets or liabilities. Available Legal Structures Legal Form UCITS Retail Non –UCITS PIFs Open - ended Investment Companies (SICAV) (Most Popular) Y Y Y Close-ended Investment Companies (INVCO) N Y Y Unit Trusts Y Y Y Limited Partnerships Y Y Y Contractual Funds Y Y Y Eligibility of Investors Experienced Investor Qualifying Investors Extraordinary Investors Person having at least 1 year of relevant work experience in financial sector, or person active in such types of investments. Person or entity has net assets in excess of Euro / Dollar 750,000. If PIF is structured as trust, amount applied to net value of trust’s assets. Condition met alone or jointly with spouse. Person or entity has net assets in excess of Euro / Dollar 750,000. If PIF is structured as trust, amount applied to net value of trust’s assets. Condition met alone or jointly with spouse. Reasonable experience in acquisition or disposal of funds / instruments with similar risk profiles as proposed PIF Reasonable experience in investment decisions on funds with similar risk profile / instruments of proposed PIF Senior employee or director to service providers of PIF Has frequently carried out investment transactions of significant size Senior employee or director to service providers of PIF Investor is PIF promoted to extraordinary investors Relation or close friend of promoters limited to 10 persons per PIF Body corporate or partnership wholly owned by persons or entities meeting these criteria, where used as investment vehicle by the corporate or partnership Any other appropriate justification Entity with minimum of Euro 3.75 million under discretionary management investing on its own account Investor is PIF promoted to qualifying or extraordinary investors Body corporate or partnership wholly owned by persons or entities meeting these criteria, where used as investment vehicle by the corporate or partnership
  3. 3. Malta’s International Legal & Advisory Firm Licensable Activities Investment funds must have a license from the Malta Financial Standards Authority (MFSA), before (i) units can be issued or created, or (ii) activities can be carried out in or from within Malta. Exempt Activities The following activities do not require licenses:  Funds involving participants carrying on a business that does not constitute an investment serve and enters into the arrangement for commercial purposes related to that business.  Funds which operate under the principle of risk spreading, where the contributions of the participants, profits or income from payments are to be made are pooled, provided the general purpose of the scheme is commercial and not for investment purposes  Schemes operated by a company or its group of companies for its employees (past and present, as well as dependents), in instruments issued by the company/group and any other instruments as approved by the MFSA. Private Funds A separate licensing regime applies to private funds where they are subject to a ‘recognition’ as opposed to the full licensing regime. A private fund must have the following features:  Total number of participants are limited to 15  Fund does not qualify as a professional investor fund (meaning a non-retail fund)  Fund is private in nature. European Union Passporting UCITS fund units can be freely marketed or promoted within the EU by virtue of the Passporting arrangements under UCITIS IV Directive. Fees Malta has one of the lowest levied fees in comparison to other states in the European Union and the traditional offshore jurisdictions such as the Cayman Islands. Scheme Application for Preliminary Indication Sub-Fund €600 of acceptability of PIF (irrespective of number of Sub-funds) Application for PIF Licence Annual Supervisory Fee €1,500 €1,500 €1,000 per Sub-fund €500 per Sub-fund Malta Taxation of Funds Prescribed - 85% of assets located in Malta Fund Non - Prescribed - 15% of assets outside of Malta & Overseas UCITS 15% - Bank Interest 10% - certain investment income 35% - Malta real estate income 0% - all other income 0% tax on income or gains (Malta real estate income taxed) Non-Resident Investors No tax if withheld at source. Can opt not to have any source deductions. 0% on distribution Resident Investors No tax if withheld at source or deducted in line with personal circumstances. 15% on distribution Acumum - Legal & Advisory ‘Uniquely local - Uniquely International’ Located in the EU tax efficient jurisdiction of Malta, Acumum Legal & Advisory employs Maltese, UK, & international lawyers & tax accountants - with extensive on-location & off-shore international experience - providing appropriate, bespoke solutions. Excellence| Superb Client Service | Cost Efficient Dubai, Luxembourg & Portugal Representative Offices info@acumum.com | www.acumum.com | Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU) Information for guidance purposes only © Acumum 2014 All Rights Reserved
  4. 4. Malta’s Highly Qualified Earners Scheme 15% flat rate income tax rate for senior employees within the financial services sector For individuals working in the financial services industry, in addition to the ‘one stop shop’ approach of the Malta Financial Services Authority (MFSA) and the flexible regulations detailed above, Malta has enacted a low, flat rate of 15%. Malta’s International Legal & Advisory Firm Index. €78,207 for basis year 2012 and €80,100 for 2013 “Eligible office” is employment in one of the following positions: As such, Malta authorities have created a scheme to attract highly qualified persons who occupy as “eligible office” with companies licensed and/or recognized by either the Malta Financial Services Authority (MFSA).         Malta wants to attract high income individuals and why not? The 15% flat rate is imposed up to a maximum income of €5 million - any Positioning itself as a premier financial excess is exempt from tax. The 15% tax and commercial district, Malta employs rate applies for a consecutive period of five years for EU, EEA and Swiss nationan attractive low tax regime for busials and for a consecutive period of four nesses. On a personal front, with its years for third country nationals. Mediterranean climate and lifestyle, there are numerous options and levels in Malta for accommodation, entertain- EU. EEA and Swiss individuals who already have a qualifying contract of emment and schools. ployment in an “eligible office” for two Individual income from a qualifying years (or one year for 3rd party nationcontract of employment in an “eligible als) before 2008 may still benefit from office” with a company licensed and/or the 15% tax rate for the remaining recognised by the Competent Authority is subject to tax at a flat rate of 15% on years of the statutory period. an income of at least €76,136 adjusted annually in line with the Retail Price          Actuarial Professional Chief Executive Officer Chief Financial Officer Chief Commercial Officer Chief Insurance Technical Officer Chief Investment Officer Chief Operations Officer Chief Risk Officer (including Fraud and Investigations Officer) Chief Technology Officer Chief Underwriting Officer Head of Investor Relations Head of Marketing (including Head of Distribution Channels) Head of Research and Development; (including Search Engine Optimisation and Systems Architecture) Portfolio Manager Senior Analyst (including Structuring Professional) Senior Trader/Trader Odds Compiler Specialist Acumum - Legal & Advisory ‘Uniquely local - Uniquely International’ Located in the EU tax efficient jurisdiction of Malta, Acumum Legal & Advisory employs Maltese, UK, & international lawyers & tax accountants - with extensive on-location & off-shore international experience - providing appropriate, bespoke solutions. Taxation Corporate & Company Formation Financial Services Licenses Gaming Aviation Insurance Licenses Intellectual Property Trusts & Foundations Maritime & Yachts Telco, Tech, Media Estate & Wealth Management Arbitration & Litigation Immigration & Residency Divisions Compliance Accounting, Tax & Back Office Excellence| Superb Client Service| Cost Efficient Outsourcing Dubai, Luxembourg & Portugal Representative Offices info@acumum.com | www.acumum.com | Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU) Information for guidance purposes only © Acumum 2014 All Rights Reserved

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